Pennon feels pain of recycling squeeze

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Revenues from recycling have been steadily droppingMatt Cardy/Getty Images

Business staff

Last updated at 3:21PM, August 17 2012

The owner of South West Water today warned of a plunge in trading at its waste division as recycling prices continue to slide.

Pennon said that the first-half performance at Viridor, which provides recycling and waste collection services, was “significantly” below a year earlier, when recycling prices peaked.

The waste business — regarded as the group’s growth engine less than a year ago — has suffered from tumbling prices for waste paper and recovered metals in recent months as wider economic woes take their toll.

Pennon has been slashing costs at Viridor and renegotiating customer contracts to offset the division’s trading troubles